Centrifuge Chain Governance
Welcoming Chorus One to the Centrifuge Council
Centrifuge Chain has a formalized governance system that is encoded on-chain utilizing the Substrate democracy pallet. This enables on-chain voting mechanisms for binding and transparent governance by Radial (RAD) token holders.
RAD holders can vote with their stake on referenda that are proposed by the Centrifuge community or the Centrifuge Chain Council; a body of 7 members elected by RAD holders. To make any change requires a stake-weighted majority approval by RAD holders.
RAD holders can propose and vote on changes such as runtime upgrades, distribution of treasury funds, chain parameters, and the governance system itself. RAD holders vote on proposals with their tokens and increase the weight of their vote by locking up tokens for extended periods of time along with their vote.
Centrifuge Chain Council
The Centrifuge Chain Council comprises a body of 7 elected members who gain prioritized voting rights over other RAD holders. The purpose of the council is to propose referenda beneficial to the Centrifuge Network, based on member’s expertise and experience in developing, maintaining, and using Centrifuge. The council also serves to represent passive RAD holders who may not participate in all referenda.
The council currently comprises several Centrifuge team members, Fabian Gompf from Parity Technologies, and Chorus One — who runs several validators on Centrifuge Chain.
We sat down (virtually) for a Q&A with the Chorus One team to ask them about how they work and why they are interested in participating in Centrifuge.
How did you get into validating? When and how did you start to validate/mine?
We founded Chorus One in early 2018 because we saw that Proof-of-Stake was becoming the predominant way of securing blockchains, but there was a lack of professional infrastructure. We started validating on the Cosmos testnets and invested a lot of energy in security and availability in that first year. Since then, we have expanded and now operate infrastructure on over 14 different decentralized networks.
Why did you decide to form Chorus One and run validators for different chains? What is the setup of Chorus One like from a business perspective?
We see running validators for Proof-of-Stake networks as a crucial activity to help launch, operate, and govern decentralized networks. Our mission is to increase freedom and autonomy for people by helping them have more control over their assets and activities. Proof-of-Stake is a key technology to make that happen and validators operate that infrastructure.
In terms of the business setup, we are a Swiss corporation. We have about ten people on our team at the moment based in Switzerland, US, UK, Germany, Poland, France, and India.
How do you decide which projects to work with?
The Cosmos vision from the start was centered around a multi-chain world — “the Internet of Blockchains”. We still believe in this vision that seeks to give sovereignty to applications, while allowing them to interoperate when needed. The design space for blockchains is enormous, and many different teams are opting for different trade-offs. Some of the criteria that we use to select networks aside from the tech itself, are whether we like the vision and the team, the complexity of technical integration, and if the economics are sound.
What made you decide to validate Centrifuge Chain?
Parts of our team had the pleasure of working out of the same co-working office in Berlin (Full Node) and got to know Centrifuge that way. We immediately understood the massive opportunity of bridging real-world assets into decentralized finance. Getting to know the team we felt that they have the right combination of a sound technological approach and go-to-market strategy, which is why we didn’t hesitate to onboard Centrifuge!
What are the main challenges in offering validating services (e. g. convincing the community to nominate you, infrastructure)?
There are a variety of technical and operational challenges since we are working with projects whose beta software undergoes constant changes and we are committed to provide a service that can reliably secure multi-million dollars worth of assets. On the other hand, there is competitive pressure especially from centralized exchanges that can offer staking at almost zero cost to them, which puts the viability of non-custodial staking at risk.
What do you see as the next step for Validators in this space? How will the business model change?
Non-custodial providers such as ourselves need to figure out ways to compete with exchanges. We are very interested in exploring staking designs that allow non-custodial staking to rival the UX of centralized exchanges, e.g. through tokenization of stake and merging the DeFi and staking space — a topic that we have researched in depth over the past few months. Check out the research report on liquid staking that we just released: https://blog.chorus.one/liquid-staking-report/
We also see some potential to differentiate for validators in helping their customers optimize their staking rewards and experience across protocols. Additionally, sharded protocols that have many validator slots like Polkadot and Eth2 will introduce new challenges in optimally managing operations with respect to on- and offboarding new validator nodes.
How do you tackle security issues in such a nascent space?
We pay a lot of attention to proper handling of keys and also maintain a highly available operation. Since cryptographic primitives are developing rapidly, the tools such as HSMs are often not supporting the cryptographic curves that blockchain applications might need, so we often need to customize setups so they meet our standards. We are anticipating tools such as that of our friends Certus One (signOS) to help validator key management in the future. Furthermore, we try to communicate with protocol designers to pay more attention to their validators’ concerns, which sadly often aren’t considered enough during protocol design phases or when planning upgrades.
Are there any resources you would recommend to new Validators looking to get started?
Many validators that are active in the space for a while have published documentation of their architecture and approaches to security. Aside from our own, in the meantime somewhat outdated, infrastructure document, we can also recommend Certus One’s Knowledge Base.
In general, new validators should be thinking about what unique value they can provide to an ecosystem that will help them get delegations and recognition of token holders.
And finally — is there anything Centrifuge could improve? How could your experience validating Centrifuge Chain be better?
So far we are very happy with how Centrifuge has communicated with and supported us. The choice to use Substrate also means there is already a lot of tooling available, which will likely get even better in the future. We are excited to see the Centrifuge and Tinlake ecosystems growing and we are looking forward to being able to contribute to Centrifuge’s vision of decentralized asset finance!